A hedge fund assumes risk from the reinsurer in the form of a reinsurance contract. Because it is a special purpose \’vehicle\’ created by the hedge fund with the reinsurer it gets its name \’sidecar.\’It is usually capitalized by both the reinsurer and the hedge fund.
http://www.deweyballantine.com/docs/publications/2002.pdf?u=The%20Benefits%20of%20Side%20Car%20Funds%20Explained
Forgive my lack of knowledge, but what are \”sidecars\” as alternative financing? Thanks.
A hedge fund assumes risk from the reinsurer in the form of a reinsurance contract. Because it is a special purpose \’vehicle\’ created by the hedge fund with the reinsurer it gets its name \’sidecar.\’It is usually capitalized by both the reinsurer and the hedge fund.
Dear gak, thank you for the response.